The E C O N O M I C IMPORTANCE of NEW HAMPSHIRE’S … · The Economic Importance of New Hampshire’s Forest-Based Economy. FOREST-BASED ECONOMY 2013. E C O N O M I C. IMPORTANCE

1The Economic Importance of New Hampshire’s Forest-Based Economy

FOREST-BASED ECONOMY 2013

E C O N O M I CIMPORTANCE

North East State Foresters Association

The

NEW HAMPSHIRE’Sof


I. Introduction

Thank you for reading this latest edition of the Economic

Importance of New Hampshire’s Forest-Based Economy. I hope

you will find the material provided within valuable and informative.

This latest installment updates and expands upon the facts and

figures presented in earlier editions, provides trends over time, and

paints a clear picture of how important our forests and trees are to

our state’s economy.

While the statistics in this publication focus on economic numbers

and dollars, our forests are much more than that. Although hard

to assign a number to, the value that our trees provide to our

social and environmental well-being is almost limitless, and would

undoubtedly multiply the figures found in this document many-

fold. We are very fortunate in New Hampshire to live in a state that

is 84% covered by trees; a state that is defined in large-part by

our vast stretches of forest. These forests provide critical wildlife

habitat, clean water, clean air, abundant recreational opportunities

and store carbon, all while providing us a valuable renewable

resource for a multitude of products from furniture to paper to fuel

for heat and electricity production.

It should be noted that this expansive, healthy forest that is so important to our economy is

predominantly privately-owned, at almost 76%. Therefore, maintaining this resource to provide benefits

for future generations is largely in the hands of these 100,000+ landowners. An important incentive to

continue maintaining land in forest is to ensure a healthy forest products industry. A vibrant industry not

only provides for a healthy forest and important forest products, it also provides an economic motivation

for forest landowners to keep their land in forest rather than development. This, along with wise forest

management and tax policies, will help to protect our forests and secure the many values they provide,

both economic and otherwise, well into the future.

Thank you,

Brad W. Simpkins

Director, NH Division of Forests & Lands State Forester

Acknowledgements: Funding for this report was provided by the Public Service Company of NH and the U.S. Endowment for Forestry and Communities through the Northern Forest Center.

This report is an update of a series of similar reports that have been published for the State of New Hampshire by the North East State Foresters Association since the early 1990s. The goal is to capture the economic value of the forest-based economy of the State and provide analyses of trends for key economic indicators. The sectors covered in this report include forestry and logging, related trucking, wood products manufacturing, wood furniture and related products manufacturing, pulp and paper manufacturing, wood energy, and the forest-based recreational economy that includes camping, hiking, hunting, downhill skiing, cross-country skiing, snowmobiling, fall foliage viewing, and wildlife viewing. Additional discussions in this report, compared to past reports, include use of economic multipliers to give a truer picture of the forest-based economy, carbon content of the forests of New Hampshire and the relationship of ecosystem services to the forest-based economy.

Data for this report come from federal, state and private sources. For a full list sources, please see the end of this report.

We would like to thank the many people who assisted with the development of this report including Brad Simpkins and Jonathan Horton of the New Hampshire Division of Forests and Lands at the Dept. of Resources and Economic Development and Sarah Smith and Karen Bennett of the UNH Cooperative Extension.

Brad W. Simpkins, State Forester New Hampshire Division of Forests and Lands


• Forestareaandspecies–New Hampshire’s forests cover 4,833,332 acres of land or 84% of the State and

have largely been at this level since the 1980s. Northern hardwood (beech, birch, maple) forests make up over 53% of the forest cover.

• Forestownership–NewHampshire’sforestscontinuetobelargelyprivatelyownedbyindividuals/families and business who together own over 76% of the forest. The state owns 5% of the forests and the federal

government, primarily through the White Mountain National Forest, own 14%.

• Forestinventory,growthvs.harvest–TheforestsofNewHampshirecontinuetoaddtotheinventoryoftree

volume as net growth exceeds harvest annually. Currently, New Hampshire’s forests grow 200.4 million cubic feet per year while approximately 138.8 million cubic feet of timber is harvested annually. New Hampshire’s

standing forest contains 6.3 billion cubic feet (196 million tons or 78.4 million cords) of timber 5 inches in

diameter or larger.

• Valueofforestindustryeconomicsectors–TheannualvalueofsalesoroutputofNew Hampshire’s forest products industry totals nearly $ 1.4 billion while the forest-based recreation economy is also worth approximately $1.4 billion. Approximately 7,756* workers are employed in the forest products, maple and Christmas tree sectors while another 10,800 jobs are found in the sectors that include and support the forest recreation economy. There are approximately 1200 loggers, 500 foresters and technicians, 800 truckers and

161 sawmills operating in the Granite State. Thirty-five of these sawmills produce the majority of sawed volume.

Landowners received approximately $30 million in stumpage payments for timber harvested in 2012. Of that,

approximately $3 million was paid in timber tax to NH communities.

• Using multipliers generated through IMPLAN, an economic model, it is estimated that the forest products sector has $2.4 billion in economic output and 12,818 jobs when taking into account the rippling effect this

industry has on the other parts of the economy.

• Economic output and number of jobs in the forest products sector have been reduced since peaks in the 1990s and early 2000s. This

has mirrored similar trends in other

manufacturing sectors in the U.S. as

more and more manufacturing has

moved to other parts of the world.

• Whilemostofthewoodharvested

in New Hampshire is processed in

New Hampshire, wood flows freely

in the regional economy. In 2011,

1.315 million cords of wood were harvested in New Hampshire, 1.195 million cords were processed in New Hampshire while 665,000 cords were exported and 493,000 cords were imported.

GSP – Gross State Product includes value added, which is equal to its gross output minus its intermediate purchases from domestic industries or from foreign sources.

Gross Output – Includes the total value of all products produced and shipped by all producers (essentially sales).

Table 1.

Gross State Output (GSP), Forest-based Manufacturing & Recreation, New Hampshire, 2011

millions of jobs*

Forestry, logging & trucking $150 2,860

Wood products manufacturing $401 1,996

Furniture and related product manufacturing $190 1,140

Paper manufacturing $481 1,100

Wood energy $166 470

Christmas trees and maple syrup $6 190

Sub-total direct $1,394 7,756

Sub-total with multipliers $2,404 12,818

Forest Recreation $1,400 10,800

Total $3804 23,618

GSP, Forest Products Manufacturing $341

GSP, All Manufacturing, New Hampshire $7,657

GSP, Total for New Hampshire $64,975

*full-time equivalent jobs

II. Executive Summary


Forest AreaAt over 84% forest cover, New Hampshire is

the second most forested state in the country

behind Maine. Of the 4,833,332 forested acres in

New Hampshire, 4,638,230 acres are considered

“timberland,” meaning these lands are capable of

producing repeated timber crops.

Data from the National Land Cover dataset from US

Geological Survey shows that from the period of 2001

to 2006, the most recent data available, there was a

net loss of 9,387 acres of forest to non-forest use.

A long-term forestland acreage trend analysis

coordinated by the Harvard Forest shows that New

Hampshire’s forested area is only somewhat less than

when Europeans first arrived in North America (See

Figure 1). It is estimated that in the year 1600 forests

covered 5.6 million acres compared to today’s 4.8

million. The Granite State’s forests have grown back

after reaching a low of 2.8 million acres in 1860. Since

a recent peak in 1970, forest acreage has gone down

approximately 300,000 acres but has leveled off in

recent years.

Forest OwnershipThe individual/family forest and business owner

sector continues to dominate the ownership of New

Hampshire’s forest. Fully 68% of New Hampshire’s

forests, or 3.6 million acres, are owned by individuals

or families (Figure 2) and an additional 8% is owned

by business1. The State of New Hampshire owns 5%

or approximately 211,000 acres of New Hampshire’s

forest and the federal government, mostly in the White

Mountain National Forest, another 14% at 672,000

acres. Cities, towns and counties own approximately

5% of the forests or approximately 226,000 acres.

Forest TypesNew Hampshire’s forests are dominated by the

northern hardwood type (beech, birch, maple)

comprising more than 2.4 million acres of the New

Hampshire woods. White-red pine (mostly white

pine) cover 566,000 acres and spruce-fir another

378,000 acres.

III. The Forest Resource

Figure 3

New Hampshire Forest Types

Figure 2

New Hampshire Timberland Ownership (acerage)

Business 8%

Federal 14%

State 5%

Local 5%

Family 68%

Source: USDA Forest Service, Forest Inventory and Analysis & private data

Spruce/Fir8%

Other 21%

Northern Hardwood

53%

White/Red Pine12%

Aspen/Birch 6%

1. Business forest owners are generally large ownerships but some medium to small ownerships in the 5,000 acre category are included in this definition.

Figure 1

New Hampshire Forest Acreage

0

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

Acr

es

Forest Acreage

1700

1800

1820

1840

1860

1880

1900

1920

1940

1953

1970

1998

2012

Source:. USDA Forest Service, Forest Inventory and Analysis.

Source:. USDA Forest Service, Forest Inventory and Analysis.


Timber VolumesTo understand the volume of wood growing in

the forests of New Hampshire, it is most useful to

look at inventory trends over time rather than just

current volumes. Growth, mortality and harvest levels

determine the overall changes over time. At gross

volume levels, Figure 4 shows that standing volume

of timber in New Hampshire increased approximately

32% from 1983 to 2012. Standing volume is nearly

196 million tons of wood in trees 5 inches and larger.

From a timber value perspective, it is important to

know what is occurring over time with the sawtimber

component of the timber inventory in New Hampshire

since sawtimber products are generally much more

valuable than lower quality logs (pulpwood, firewood

and energy chips). In Figure 5, we see that the volume

of sawtimber trees also increased from 1983 to 2012, in

this case, by over 70%.

Source: USDA Forest Service, Forest Inventory and Analysis

Figure 4

Biomass on Timberland - dry weight of merchantable bole 5” and up - New Hampshire

Figure 5

Net Volume of sawtimber trees board feet 1/4 inch in New Hampshire


tons

1983 1997 2006 20120

50,000,000

100,000,000

150,000,000

200,000,000

boar

d fe

et

0

5,000,000,000

10,000,000,000

15,000,000,000

20,000,000,000

25,000,000,000

30,000,000,000

35,000,000,000

1983 1997 2006 2012


New Hampshire’s forest inventory, in terms of volume

and value, is increasing. To understand this better, we

need to look at growth, mortality and tree removals.

The USDA Forest Service’s Forest Inventory and

Analysis (FIA), where much of the data discussed so

far in this report is derived, is also the best source

for understanding growth, mortality and removals.

The FIA data set is derived from a series of fixed,

on-the-ground plots that are re-measured, roughly

every five years. Each on-the-ground plot represents

approximately six-thousand acres and has been

providing forest data for over 50 years.

In Figure 6, the current FIA data shows that in New

Hampshire’ forests, annual net growth2 is 200.4 million

cubic feet per year. At the same time, approximately

134.8 million cubic feet of timber is harvested annually.

Thedifferencebetweenthenetgrowthandharvests–

65.6millioncubicfeet–istheannualextragrowth

that accounts for the increasing inventory of trees in

New Hampshire.

The difference between forest net growth and

harvests is a key measurement for understanding the

sustainability of the use of the forest. There are other

aspects of forest management, including the following,

that further add to understanding the status of forest

sustainability in a state:

a. Certified forestland –Thereareasubstantialnumber of acres of certified lands under the

American Tree Farm System, Forest Stewardship

Council and Sustainable Forestry Initiative in

New Hampshire. About 863,000 acres of New

Hampshire’s forests are certified through one of

these systems. In addition to the sustainable harvest

levels discussed above, these voluntary standards

cover a full range of requirements covering forestry,

ecological, economic, and social issues.

b. Best Management Practices for Water Quality Protection –Thebiggestimpacttoforests,aside

from their conversion to a non-forest use, is forest

harvesting activities. Truck roads, skidder trails, and

presence of heavy equipment are integral to forest

harvesting operations. Water quality degradation

and soil erosion can result if proper procedures are

not followed. New Hampshire, along with virtually all

forested states in the country, has had in place for

many years voluntary Best Management Practices

for Forestry, commonly called best management

practices or BMPs. The three certification programs

all require use of BMPs and, more importantly,

use of BMPs on forestry operations has become

integrated into most forest operations in the last

several decades. The culture in the forest industry

haschangedinthatregard–itissimplynolonger

acceptable to negatively affect water quality or soils

in forest operations.

c. Use of professional foresters and loggers –The use of licensed foresters and certified loggers

is key to assuring sustainable harvesting operations,

whether lands are certified or not. Information from

the National Woodland Owners Survey of the USDA

Forest Service shows that foresters are involved

in forest operations on over 54% of the harvests

on family forest owner land in New Hampshire.

Data from the NH Cooperative Extension review of

Intent and Report of Cut reports from the timber

tax showed that in 2011, 25% or the harvests had

foresters involved. Additionally, a high percentage

of loggers operating in New Hampshire are either

trained or certified through the Professional Logger

Program and/or Master Logger programs.

2. Net growth means the growth of the trees in the forest less the mortality of trees

Sustainability - Growth, Mortality and Removals from New Hampshire’s Forests

Figure 6

Growth vs. Harvest - New Hampshire forests


Cubi

c Fe

et

0

500,00,000

100,000,000

150,000,000

200,000,000

250,000,000

2007 2012

■ Net Growth 177,443,022 200,412,483■ Removals 174,695,058 134,813,612


Carbon in New Hampshire’s Forest It is well known that trees and forests are an important

element of the Earth’s carbon equation. Science

has shown that carbon dioxide levels are increasing,

likely in large part due to emissions associated with

human industry and transportation. Most scientists

believe that this increase in carbon dioxide and other

“greenhouse gases” is the key reason why planetary

temperatures, on average, are on the rise. Forests

naturally take carbon dioxide out of the atmosphere

in their normal practice of photosynthesis, and the by-

product emitted to the atmosphere is the oxygen that

we breathe.

The result of this natural phenomenon is that as

forests grow, and if their inventory of wood increases

over time, they act as positive carbon sinks where

atmospheric carbon dioxide is turned into carbon in

the wood of the tree. Forests with increasing volumes

and carbon mass can provide a positive benefit in the

greenhouse gas equation.

According to FIA data, the carbon in the above-

ground portion of trees one-inch in diameter or more

has increased in New Hampshire over 4% from 2006

to 2012.

Figure 7

Aboveground carbon in live trees 1”+ in New Hampshire


2006

Tons

2012128,000,000

130,000,000

132,000,000

134,000,000

136,000,000

138,000,000

140,000,000

2009


Using the Northern Forest Biomass Project Evaluator3

tool developed by the North East State Foresters

Association through a grant provided by the USDA

Forest Service, we are able to take a look at a possible

future inventory of the forests of New Hampshire. The

evaluator provides a computer model of net growth

based on input of a number of variable factors. Figure

8 shows a likely 20 year future projection of the forest

resource in New Hampshire based on assumptions

that harvest levels stay constant, timberland acreage

is reduced slightly over time and the growth rate is

reduced slightly over time.

In this likely future, the total growth and accessible

growth increases and the total inventory increases

from 490.1 million tons of standing forest at the

beginning of the period to 613.6 million tons at year

20 including all live woody biomass. This represents a

25% increase in standing volume of the forests of New

Hampshire, across all ownerships and acreages.

3. Go to www.nefainfo.org to obtain a working version of the model for your own use.

Figure 8

Northern Forest Biomass Project Evaluator – A steady state run for New Hampshire for 2013-2023Inventory totals are for all live, above-ground biomass on timberland.

0100200300400500600700

02,0004,0006,0008,00010,00012,00014,000

Inventory Total Growth Accessible Growth HarvestInventory Change

Inve

ntor

y Vo

lum

e (M

ilion

GT)

Gro

wth

& H

aves

t Vo

lum

e(T

hous

and

GT)

Model Period1 2 191817161514131211109876543 20

New Hampshire’s Forest Projections


Forest HealthThe effects of climate change on the forests of New

Hampshire remain uncertain. This phenomenon may

even increase forest growth, and we simply do not

know enough to suggest long-term effects on the

trees directly from climate change.

The three insects of greatest concern today are

hemlock woolly adelgid, emerald ash borer and

Asian longhorned beetle. At the moment, the Asian

longhorned beetle is still in the Worcester, MA area

and heroic efforts, at great cost, are attempting

to eradicate it. The other two are found in New

Hampshire, but fortunately, only affect two tree

species: ash and hemlock. No big losses have occurred

yet in New Hampshire, but hemlock wooly adelgid is

being found throughout southern NH counties and a

recent discovery of emerald ash borer in the Concord

area is substantial.

Spruce budworm may show up again which could

affect a small acreage in New Hampshire. The last

outbreak was in the late 1970s, and it resulted in the

mortality of vast acreages of spruce-fir forests from

Maine to New York. Should another outbreak of spruce

budworm appear, it could have significant effects in

the very spruce-fir forests that regenerated beginning

in the late 1970s following the last outbreak.

Lastly, invasive plants, such as autumn olive,

buckthorn, Japanese knotweed, bittersweet and garlic

mustard all appear to be growing in area and reach. As

these invaders become more established, forest trees

are being affected and in some cases are crowded

out by these invasive plants. Climate change and

related temperature increases may stimulate growth of

valuable trees but it also allows invasive plants to get

established and grow faster as well.

ECONOMIC MULTIPLIERSThe data used for economic output and

jobs in this report are for direct jobs

and output. All sectors of the economy

have connections to other parts of the

economy that are not recognized in direct

jobs and output numbers. Economic

multiplier formulas are often applied to

better represent the effect of a sector on

the economy. In the past reports like this

from NEFA, economic multipliers have not

been used for the forest products sector

and sub-sectors. As in the past reports,

the way the forest recreation jobs and

economic value have been developed is by

an industry standard that uses a multiplier-

like approach to value the effect that the

recreation economy has on New Hampshire.

There are a number of readily acceptable

economic multiplier formulas and we have

chosen to use IMPLAN here because it was

created with the forest products industry

in mind. Compared to an annual value to

the economy of $1.4 billion, with IMPLAN

multipliers, the forest products economy

output is valued at over $ 2.4 billion

annually. Without multipliers, the forest

products economy jobs are estimated at

7,756 and with multipliers 12,818 jobs.


The forest-based economy of New Hampshire, one of

the oldest industry sectors in the State, includes forest

products and non-consumptive uses of the forests.

Forest products manufacturing includes the

forestry, logging, and trucking components in which

management, harvesting, and transportation move

the raw material from the forest to various markets

for processing. From there, primary products are

manufactured into solid wood products in sawmills,

out-of-state veneer mills, and wood chip reconstituted

mills such as oriented strand board plants or particle

board manufacturers though the latter two are not

found in the Granite State at this time. These primary

products are then used by secondary manufacturers

in making finished goods such as furniture, moldings,

and turned wood products. Although there are no

longer wood pulp mills in New Hampshire, there are

paper manufacturing plants that obtain pulp material

from out-of-state pulp mills. Some of the timber

harvested in NH’s forests goes to these pulp mills.

Lastly, the growing wood energy sector includes

large wood-fired power plants, medium to small sized

commercial facilities using woody biomass to create

heat and/or electricity, and at the residential level

where homeowners heat their homes with firewood or

wood pellets.

Forest-based recreation is a large and growing part

of the economy. Thousands of people visit New

Hampshire’s forests for camping, hiking, hunting,

downhill skiing, cross-country skiing, snowmobiling,

wildlife viewing, and fall foliage viewing.

It must be noted that some of the data included in

the next sections are from 2012 but most are from

2011. Activity and output in the forest products

manufacturing sector has seen a big upturn in 2013

as the country comes out of the recession and the

economy recovers. The data below does not show this.

Forestry, logging, and truckingThe forestry, logging, and primary trucking sectors of

the economy move logs, pulpwood, firewood, or chips

from the forest to their primary manufacturing market.

Employment in this sector is estimated at 1,359 jobs

down from a high of over 1,665 in 2002 (see Figure

9). Payroll for forestry and logging in New Hampshire

exceeds $86 million annually (Figure 10) and has

trended upward since 2009.

The annual economic activity for forestry trucking,

found in the form of annual sales or value of

shipments, is over $ 59 million (Figure 11).

Source: U.S. Census Bureau – Census of Manufactures 2013 & industry estimates

Figure 9

New Hampshire forestry, logging & trucking jobs

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

0200400600800

10001200140016001800

Figure 10

New Hampshire forestry and logging payroll

Source: U.S. Census Bureau – Census of Manufactures 2013

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

$100

0

010,00020,00030,00040,00050,00060,00070,00080,00090,000

Figure 11

Forest products transport value of shipments in New Hampshire

Source: U.S. Census Bureau – Census of Manufactures 2013 and trucking industry non-published data

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

$1,0

00,0

00

0

10

20

30

40

50

60

70

80

IV. Forest-Based Economy – current status and trends


Makers of lumber employ 1,996 workers, which is

down from a high of approximately 4,336 in the year

1998. Interestingly, during the period from 1997 to 2011,

worker productivity increased. In 2011, it took about

60% the number of workers to produce the same

value of wood products as in 19974. Payroll in the wood

products sector is approximately $ 62 million annually.

As seen in Figure 13, payroll has decreased since a

high of $ 140 million in 2000.

Lastly, annual economic output, in the form of

annual sales or value of shipments for the wood

products sector is approximately $ 401 million in New

Hampshire. This sector peaked with economic output

of approximately $ 600 million in 2005.

4. Worker productivity analysis based on value of product rather than volume is complicated by the fact that prices per unit of product tend to rise with inflation over time.

U.S. Dept. of Commerce – Bureau of Economic Analysis

Figure 12

New Hampshire wood manufacturing jobs

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

num

ber

of jo

bs

0

1000

2000

3000

4000

5000

Figure 13

New Hampshire wood products manufacturing payroll


1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

$100

0

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

Figure 14

New Hampshire wood products manufacturing output

U.S. Dept. of Commerce – Bureau of Economic Analysis & Census of Manufactures

GDP – Gross Domestic Product includes value added, which is equal to its gross output minus its intermediate purchases from domestic industries or from foreign sources.


1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

$1,0

00,0

00GDP Gross Output

0

100

200

300

400

500

600

700

Primary manufacturing – wood products


Pulp and paperThe pulp and paper industry combines primary

manufacturing in the pulp facilities and secondary in

the papermaking section of the plant. In most cases,

these two activities take place in the same facility.

However, there are no pulp mills in New Hampshire

but there are paper-making plants. These facilities

employ over 1,100 workers, down from approximately

5,200 in 1990 when there were two operating pulp

mills in the state. Worker productivity in paper

manufacturing has also increased over the last 20

years. Payroll in the paper sector is approximately

$61 million annually. Payroll has decreased since a

high of $175 million in 1990.

While there are no pulp mills in New Hampshire, the

logging infrastructure annually still harvests nearly

419,000 cords of pulpwood for pulp mills in New York

and Maine.

Annual economic output, in the form of sales or

value of shipments for the pulp and paper sector,

is approximately $481 million in New Hampshire

(Figure 17).

Secondary manufacturing (furniture and related) – wood productsIn the secondary wood products manufacturing sector

–furniture,moldings,turningsandallproduction

where the primary solid products are transformed

intofinalorpartsforfinalconsumerproducts–New

Hampshire employs over 1,140, which is down from

a high of approximately 1,900 in 1999. As in other

sectors, worker productivity has increased rapidly

over the last 20 years. In 2011 it took only 67% of

the workers it took to produce a unit of value in the

secondary wood products sector as it did in 1990.

The secondary wood products sector payroll in New

Hampshire is approximately $36 million annually. It

has decreased since a high of $59 million in 2000 but

has been steady in the last several years. Lastly, annual

economic output, in the form of sales or value of

shipments for the secondary wood products sector,

is approximately $190 million in New Hampshire

(Figure 20).


Figure 18

New Hampshire secondary wood products manufacturing jobs

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

num

ber

of w

orke

rs

0

500

1000

1500

2000

Figure 15

New Hampshire paper manufacturing jobs


1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

num

ber

of jo

bs

0

1000

2000

3000

4000

5000

6000

Figure 16

New Hampshire paper worker annual payroll

U.S. Dept. of Commerce – Bureau of Economic Analysis & New Hampshire Department of Labor

$100

0

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

0

50,000

100,000

150,000

200,000


Figure 17

New Hampshire Manufacturing output

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

$1,0

00,0

00

GDP Gross Output

0

100

200

300

400

500



Figure 20

New Hampshire secondary wood products manufacturing output

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

$1,0

00,0

00

GDP Gross Output

0

50

100

150

200

250

U.S. Dept. of Commerce – Bureau of Economic Analysis & New Hampshire Department of Labor

Figure 19

Secondary wood products manufacturing payroll in New Hampshire

$100

0

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

0

10,000

20,000

30,000

40,000

50,000

60,000

Wood EnergyWhile the last decade has seen wood energy gain

increased attention at the national level, New

Hampshire has a long history of using wood for

thermal and electric energy generation. Many

New Hampshire homes use wood as a primary or

supplemental form of heating, and community-scale

biomass applications, such as heating schools with

wood boilers, has been substantial for about a decade

and continues to grow. New Hampshire has seven

operating utility-scale biomass plants generating

renewable electricity and an eighth is scheduled to

begin operation in the first quarter of 2014.

Biomassfuelusers–mostofwhichgoestofuelthe

biomasselectricityplants–useapproximately2.4

million green tons of wood annually, largely harvested

from New Hampshire’s forest as part of normal timber

harvesting operations.

Wood use for heating using wood chips and wood

pellets in homes and businesses continues to grow in

New Hampshire. A wood pellet manufacturing plant

in New Hampshire consumes an estimated 200,000

green tons of feedstock raw material. Additionally,

users of firewood, chips, and pellets to heat homes or

businesses use some 280,000 green tons annually.

According to the U.S. Census Bureau, 2011 American

Community Survey, an estimated 8% of New

Hampshire homes use wood as the primary or

significant heating source, and a large number of

homes also use wood as supplemental heat. For

many years wood has been fueling community-scale

heating, such as schools and municipal buildings.

Source: New Hampshire Division of Forests and Lands, UNH Cooperative Extension and Innovative Natural Resource Solutions LLC.

Note: Pellet plant output here represents the production of pellets at NH facilities – not use of the energy.

Figure 21

New Hampshire wood energy by sector

tons

of w

ood

wood electricity

plants

pellet plants

thermal use at residential and

commercial level

0

500,000

1,000,000

1,500,000

2,000,000


Over 75 commercial facilities use wood chips or

pellets for heating in New Hampshire, and the number

is increasing rapidly. Biomass energy generates

electricity, provides heat, and is expected someday to

be a source for liquid fuel. Biomass is a locally sourced

fuel, and - unlike most other energy sources used in

NewHampshire–benefitsthelocaleconomythrough

jobs in the harvesting, processing, and use of wood.

Switching to biomass from fossil fuels often results in

emissions reductions, depending upon the application

and the fuel being replaced or offset. Biomass fuel

is made from low-grade wood that is generally

not suited for higher value markets. In providing a

market for low-grade wood, it provides landowners

and land managers options and opportunities for

practicing forestry. In many applications, biomass is

cost competitive, and can provide consumers with

an opportunity to save money, use a renewable fuel,

and support the local economy. In today’s economy,

homeowners who switch from using fuel oil to wood

pellets can save 50% on their heating fuel bill. It is

estimated that there are 470 direct jobs in the wood

energy sector not including the timber harvesting and

trucking sectors which are counted in another section

of this report.

People sometimes question whether wood use for

energy can be sustainable in New Hampshire. Overall,

as shown in Figure 6, New Hampshire is harvesting

far less than the forest is growing, which allows for

the inventory of trees to increase over time. The

value of harvesting trees for wood energy is very

low relative to other products such as sawlogs that

go to a mill to be processed into boards. Figure 22

shows that the economics of wood energy products

make it unattractive for landowners to harvest only

biomass since its value is too low. Today, a typical

forest landowner in the northeastern U.S. will receive

only $1 per ton of biomass chips harvested. Nor do

loggers profit much from selling biomass. A logging

company most often harvests a full suite of products

–fromsawlogstopulpwoodtofirewoodandbiomass

chips–allowingthemtocovertheircostsandmake

a small profit on the overall harvest. Typically, they

cannot survive on harvesting biomass chips alone.

Landowners harvest lower value products to improve

the quality of the remaining trees in order to reap

larger returns in the future when the higher value trees

grow to maturity. Regardless of the kind of harvest,

loggers have adopted best management practices to

protect water quality, and over 863,000 acres of New

Hampshire’s forests are certified to Tree Farm, Forest

Stewardship Council, or Sustainable Forestry Initiative

standards. This helps ensure the sustainability of the

harvesting on those lands.

Most of the energy wood harvested in New Hampshire

stays in New Hampshire or in the immediate region.

The value of the wood, which is low relative to its

volume and weight, usually makes it cost prohibitive

to ship very far from where it is harvested. Some wood

pellet mills in the southern U.S. are exporting pellets

to Europe, but that is not occurring yet from New

Hampshire. The local demand for New Hampshire-

produced wood pellets continues to be strong.

Christmas trees and maple syrupThe Christmas tree and maple syrup industries are

small but well-recognized as important to the local

economy. In 2012, the wholesale and retail sale of

maple syrup and related products totaled over $4

million while Christmas tree sales were $1.8 million.

It is estimated that there are over 190 full-time

equivalent jobs in the maple and Christmas tree

sectors in New Hampshire.

Source: From typical harvest volumes and values in Maine, New Hampshire, New Hampshire and New York – state data

Figure 22

Typical volume vs. value of timber harvested in the Northern Forest region

Sawlogs Pulpwood Biomass

Volume (Tons) Value to landowners ($)

0%

20%

40%

60%

80%

100%


Wood flows and harvest over time Timber harvested in New Hampshire does not all stay

to be processed in New Hampshire. Wood processed

in New Hampshire is not all harvested exclusively in

New Hampshire. Wood flows into and out of New

Hampshire are based on many factors, such as

proximity to markets, travel routes, backhauls, and

business relationships, among others. Figure 23 shows

the flows of wood in and out of New Hampshire. Wood

flows freely in the regional economy. States cannot

regulate flow of wood products among states or to

and from Canada under the interstate commerce laws.

The forest products trend data shown elsewhere in

this report clearly show a smaller, more efficient forest

products industry exists today compared to 15 or 20

years ago, just as the other manufacturing sectors in

our U.S. economy have changed during this period.

Despite that, there is still a significant forest products

economy in New Hampshire. During that time period,

however, the volume of timber harvested from New

Hampshire’s forest has dropped from just over 2.25

million cords in 1997 to just under 1.3 million cords

in 2011, with the latter year still part of the recession

period (Figure 25).

Figure 24

Wood Flows in New Hampshire, 2011

Source: New Hampshire Division of Forests and Lands, Innovative Natural Resource Solutions LLC

Note: to convert to tons, multiply cords by 2.4 tons per cord for softwood and 2.5 tons per cord for hardwood.

Hardwood Sawlogs

Softwood Sawlogs

Hardwood Pulpwood

Softwood Pulpwood

Residential Firewood

Biomass Chips

■ Harvested 125,259 266,789 263,584 160,920 118,738 430,658

■ Exported 96,107 91,863 263,584 160,920 100 52,000

■ Imported 14,106 88,533 - - 100 390,677

■ Processed 43,258 263,459 - - 118,738 769,334

Cord

sCo

rds

0

100,000

200,000

300,000

400,000

500,000

600,000

700,000

800,000

Figure 25

Volume of wood harvested in New Hampshire

Source: NH Division of Forests and Lands and NEFA

1000

cor

ds

1997 2000 2004 2007 20120

500

1000

1500

2000

2500

Figure 23

Wood Flows to and from New Hampshire – in 1000 cords

Harvested: 1315 (3.3 million tons)Processed: 1195 (3.0 million tons)Exported: 665 (1.7 million tons)Imported: 493 (1.2 million tons)

6

316

To/from Canada

487

349To other

states

From other states to NH

Source: New Hampshire Division of Forests & Lands 2011, Innovative Natural Resource Solutions LLC


Forests dominate New Hampshire’s landscape, so a

large percentage of recreation and tourism activities

in New Hampshire are linked to the forest. Still, it

is challenging to estimate the specific contribution

made by the forest environment to recreation and

tourism expenditures. Some activities take place

primarily in the forest environment, including camping,

hiking, hunting, downhill skiing, cross-country skiing,

snowmobiling, fall foliage viewing, and wildlife viewing.

In this analysis, we assume that 75% of the value of

these activities is directly attributable to the forests of

New Hampshire. For fall foliage viewing, we assume a

percentage of 100%. The method used for the forest

recreation sector is a multiplier-like approach so that,

if comparisons between the forest products sector

and the forest recreation sectors are made, they

should be based on the multiplier applied output and

employment numbers previously reported in the forest

products section of this report.

The key data source for the economic value of forest

recreation in past NEFA publications like this one

has been the National Survey on Recreation and the

Environment from the USDA Forest Service. While this

source is used again, additionally we have used results

from the new National Survey of Fishing, Hunting,

and Wildlife-Associated Recreation, conducted most

recently in 2011 by the U.S. Fish and Wildlife Service of

the federal Department of Interior. Because of this new

data source, numbers in this report are not directly

comparable to past reports for recreation and so trend

data is not shown.

The forest-based recreational activities listed

above contribute $1.4 billion in sales annually to the

New Hampshire economy. These are distributed

among purchases at food and beverage stores,

service stations, lodging places, eating and drinking

establishments, and a host of other retail trade or

service sectors. Fall foliage viewing is the largest

contributor with over 47% of the total sales, and is

followed by, in order, wildlife watching, downhill skiing,

camping, hiking, snowmobiling, hunting, and cross-

country skiing (Figure 26).

About 10,800 people are employed in forest-based

recreation and tourism sectors with payrolls of $177

million annually. Trend data is not supplied here as it is

not directly comparable to past reports because of the

use of new data sources. The recreation economy in

New Hampshire has, overall, not changed a significant

amount since 2007 given the lead up and then

recovery from the recession.

Value of Ecosystem ServicesThe purpose of this publication is to show the

economic value of the forest-related economy in New

Hampshire. The data provided shows those parts of

the goods and services provided by New Hampshire’s

forests that can be measured and, generally, has a

monetary value placed on it within the economy. Other

goods and services from New Hampshire’s forests are

not so readily measured in dollars and cents, especially

the natural assets called ecosystem services. Forest

ecosystems are ecological life-support systems that

provide a full suite of goods and services that are

vital to human health and livelihood. They include

wildlife habitat and biological diversity, clean air, clean

water and watershed services, scenic landscapes, and

carbon storage, which we discussed briefly but did not

place a monetary value on.

Carbon in forests and, more accurately, a tree’s ability

to sequester carbon from carbon dioxide in the air

into wood through photosynthesis is now taking on

monetary value for some forest owners through the

California greenhouse gas regulatory process. Prices

being paid in 2013 range from $10 to $12 per ton of

carbon sequestered, but prices in this infant market

can fluctuate wildly. A rough average of carbon being

Figure 27

Jobs and Annual Payroll – New Hampshire forest recreation economy

Jobs Payroll

10,831 $177,851,201

Sources: Multiple sources including National Survey on Recreation and the Environment from the USDA Forest Service and National Survey of Fishing, Hunting, and Wildlife-Associated Recreation

Figure 26

Economic value of Forest Recreation in New Hampshire

Sale

s va

lue

of fo

rest

-bas

ed

recr

eati

on a

ctiv

ity

2011

Hunt

ing

Wild

life

watc

hing

Cam

ping

Hikin

gDo

wnh

ill sk

iing

Snow

mob

iling

Xcou

ntry

skiin

g

Fall

folia

ge vi

ewin

g

0

$100,000,000

$200,000,000

$300,000,000

$400,000,000

$500,000,000

$600,000,000

$700,000,000

$800,000,000

Forest-based Recreation/Tourism


sequestered in New Hampshire’s forest that can be

monetized in these new markets is likely between

0.5 ton and 1.5 tons of carbon per acre per year,

depending on the age, forest type and stocking of the

forest, among other factors. Though modest, it may be

the start of converting valuable ecosystem services to

aneconomicformhumansunderstandbest–money

in a marketplace. Regardless, ecosystem services not

yet monetized should be considered a valuable part of

the forest-based economy in New Hampshire.

Position of forest-based economy in the overall economyThe forest-based economy plays a significant role

in the overall economy of New Hampshire. Figure

28 shows that the annual value of the forest-based

economy output including forest recreation is

$2.8 billion ($3.8 billion with multipliers). Gross State

Product for all of New Hampshire’s Forest Products

Manufacturing is $341 million while the GSP of all

Manufacturing is $7.7 billion.

Issues with potential to affect the future forest economyThere are a number of issues that could affect the

future forest-based economy in New Hampshire.

• Land removed from active management–Ifsignificant acreages of forestland are removed from

the working forest, those acres may still provide

the backdrop for the forest recreation/tourism part

of the economy but will no longer also provide the

raw material for the forest products manufacturing

sectors of the economy. This can also occur when

forest land is fragmented by development.

• Climate change–Intheshort-term,slightlylonger

growing seasons resulting from shortened winters

and slightly warmer temperatures, given all other

things being equal, may increase the growth of New

Hampshire’s trees and provide for slightly longer

warm weather periods each year for recreation in

the woods. Shortened winters may have negative

effects on that portion of the recreation economy.

This phenomenon may benefit parts of the forest-

based economy. Should climate change also result

in increased forest pest problems (or result in other

changes), the perceived benefits could be offset.

Over the long-term, any positive effects from

climate change could disappear should temperature

increases and climate changes not modify over time.

Sources: U.S. Dept. of Commerce – Bureau of Economic Analysis & Census of Manufactures; USDA statistics, private data, IMPLAN

GSP – Gross State Product includes value added, which is equal to its gross output minus its intermediate purchases from domestic industries or from foreign sources.


Figure 28

New Hampshire Forest-based economy vs. overall economy

millions of jobs*

Forestry, logging & trucking $150 2,860

Wood products manufacturing $401 1,996

Furniture and related product manufacturing

$190 1,140

Paper manufacturing $481 1,100

Wood energy $166 470

Christmas trees and maple syrup

$6 190

Sub-total direct $1,394 7,756

Sub-total with multipliers $2,404 12,818

Forest Recreation $1,400 10,800

Total $3804 23,618

GSP, Forest Products Manufacturing

$341

GSP, All Manufacturing, New Hampshire

$7,657

GSP, Total for New Hampshire $64,975

*full-time equivalent jobs


• Loss of markets–Fortheforestproductssector from the woods to the mill, robust market

opportunities are extremely important. The trend

data shown in this report depicts a smaller overall

forest products manufacturing industry than

20 years ago with trends suggesting continued

contraction. The positive sign is that the industry

is producing more product per worker than ever

before and diversifying markets. The wood energy

sector continues to grow, particularly for thermal

installations in homes, schools etc. The wood

electricity generating plants continue to operate

and account for the vast majority of wood used in

energy but their future, given changing electricity

markets and public policy, is uncertain.

• Loss of tree species–Aswiththechangesbroughton in the forest economy when American chestnut

dropped out of the forest due to the chestnut blight

in the 20th century, new pathogens and invasives

may do the same for species like ash and hemlock,

with unknown effects.

• Reduced federal and state support for forestry assistance programs–Certainforestactivities,chiefly forest management by the tens of thousands

of private forest owners in New Hampshire, have

been subsidized, in part, by the federal government

in the form of cost-share payments for management

plans and a variety of forest management activities.

The New Hampshire Forest and Lands staffing

levels are also being affected by state budget issues

as are those on the White Mt. National Forest. It

is expected, in these times of reducing federal

budgets in discretionary spending, that cost-share

opportunities will dwindle, resulting in less forest

improvement work on the ground for that subset

of the forest owner population that has taken

advantage of the financial assistance.

• Federal and state tax and other policies–Businessowners in the forest products and forest recreation

sectors in New Hampshire have long said that stable

public policies are important for business. Changing

policies, however well-meaning they might be, make

for a challenging business environment.

• Cost of travel–Alargeportionoftheforest-basedrecreation economy in New Hampshire is based on

individuals traveling from other locations to visit

New Hampshire and enjoy the beauty of this heavily

forested state. The price of transportation fuels is

a key factor in whether tourists decide to travel to

New Hampshire. As transportation fuels continue

to increase, fewer out of state tourists may visit the

forests of New Hampshire. On the other hand, an

upward trend in transportation fuels can also result

in more local populations choosing to stay for local

recreation.

NEW HAMPSHIRE DIVISION OF FORESTS AND LANDS

The New Hampshire Division of Forests and

Lands, within the Department of Resources

and Economic Development, is a multi-

service agency dedicated to conserving

New Hampshire’s rural and urban forest

landscape and maintaining a sustainable

forest products industry; protecting the

health and productivity of forests against

insects, diseases, invasive plants & animals,

wildfire and weather events; and enhancing

the stewardship of NH’s private and public

forest land.

The mission of the Division of Forests and

Lands is to protect and promote the values

provided by trees, forests, and natural

communities. This mission is accomplished

responsible management of the State’s

forested resources; by providing forest

resource information and education to the

public; and the protection of these resources

for the continuing benefit of the State’s

citizens, visitors, and forest industry.

The statutory authority and guidance for the

Division is set forth in Title XIX-A Forestry

where it states the agency “shall execute

all matters pertaining to forestry, forest

management, and forestlands, within the

jurisdiction of the State...”

You can reach the New Hampshire Division

of Forests and Lands at 603-271-3456 or at

www.nhdfl.org

The National Association of State Foresters,

a non-profit organization that is made up of

the individuals who head the state forestry

agencies in the U.S, periodically reviews

information about the state agencies that

oversee forestry in their respective state.

The most recent report on this topic is

“State Foresters by the Numbers: Data and

Analysis from the 2010 NASF State Forestry

Statistics Survey” and can be found at

www.stateforesters.org website under

publications.


SourcesA Survey of Business Attributes, Harvest Capacity and Equipment Infrastructure of Logging Businesses in the

Northern Forest, Jeffrey G. Benjamin & Bennet H. Leon, University of Maine, 2012

Canham, H.O., Economic Impact from Forest-Related Recreational Activities in New Hampshire, 2010. Report prepared for North East State Foresters Association (NEFA).

Cordell, H.K. et al. 2004. Outdoor recreation for 21st Century America, A report to the nation: the national survey on recreationandtheenvironment.VenturePublishingInc.stateCollege,PA.

Economic Contribution of New Hampshire’s Forest Products Sector, University of New Hampshire for the New Hampshire Forest Products Council, 2013

Harvard Forest long-term forest acreage dataset, 2013

IMPLAN, State of New Hampshire

Innovative Natural Resource Solutions, LLC, various privately developed data

New Hampshire Division of Forests and Lands, harvesting and wood processor reports, multiple years up to 2011

National Association of Manufacturers manufacturing economic data

National Land Cover spatial dataset, US Geological Survey, 2013

National Resource Inventory, USDA Natural Resource Conservation Service, 2009.

National Survey on Recreation and Environment, USDA Forest Service, 2013

National Survey on Recreation and the Environment (NSRE) Outdoor recreation for 21st Century America, A report to thenation:thenationalsurveyonrecreationandtheenvironment.Cordell,H.K.etal.2004,2006&2011.VenturePublishing Inc. State College, PA.

NEFA, 2004. 2007 & 2011. The Economic Importance of New Hampshire’s Forest. www.nefainfo.org

New England Ag Statistics, USDA Maple Syrup 2012

Northeast Midwest Institute economic data

Northern Forest Biomass Project Evaluator, North East State Foresters Association, 2013

Statistics Canada

Stynes, D.J. & E.M. White 2006. Spending profiles for national forest recreation visitors by activity. Report to the U.S. Forest Service. Dep’t of Park, Rec. and Tourism. Michigan State Univ. East Lansing, MI.

UNH Cooperative Extension, wood energy data

U. S. Department of Commerce, Bureau of Economic Analysis, Regional Economic Accounts, 2011 and previous years. www.bea.doc.gov/bea/regional

U.S. Bureau of the Census, 2011 Economic Census, Summary Statistics for New Hampshire, NAICS Basis, Manufacturing, ME. www.census.gov

U.S. Bureau of the Census, Manufacturing, Mining, and Construction Statistics, Annual Survey of Manufacturers, Geographic Area Statistics, 2011 (issued November 2012). www.census.gov

U.S. Bureau of the Census. Population estimates. US Dept. of Commerce, Bureau of the Census. Washington DC.

U.S.CensusBureau,2005–2011AmericanCommunitySurvey,NewHampshire

U.S. Department of the Interior. 2011. National Survey of Fishing, Hunting, and Wildlife-Related Activities. USDI. Washington, DC..

US Bureau of Labor Statistics. Consumer price index. US Dept’ of Commerce, Bur. of the Census. Washington DC.

US Dept. of Labor, Bureau of Labor Statistics, www.bls.gov/eag/eag.nh.htm

USDA Forest Service, Forest Inventory and Analysis webpage, http://fia.fa.fed.us

USDA Forest Service, National Woodland Owners Survey.

USDA, New England Agricultural Statistics Services, 2010.

New Hampshire Department of Labor, labor statistics.


Brad Simpkins

Director and NEFA Treasurer

Division of Forests and Lands

NH Dept. of Resources

and Economic Development

PO Box 1856

Concord NH 03302-1856

(603) 271-2214 Phone

(603) 271-6488 Fax

[email protected]

Doug Denico

Director Maine Forest Service

Main Department of Conservation

22 State House Station

Augusta ME 04333

(207) 287-2795 Phone

(207) 287-8422 Fax

[email protected]

Robert Davies

Director Division of Lands & Forests

New York Department of

Environmental Conservation

625 Broadway

Albany NY 12233-4250

(518) 402-9405 Phone

(518) 402-9028 Fax

[email protected]

Steven SinclairDirector of Forests and NEFA Chair

VermontDepartmentofForests,

Parks and Recreation

1 National Life Drive, Davis 2

Montpelier,VT05620-3801

(802) 828-1531 Phone

(802) 828-1531 Fax

[email protected]

Terry MillerNEFA Ex-Officio member

USDA Forest Service, State

and Private Forestry

271 Mast Rd

PO Box 640

Durham NH 03824

(603) 868-7694 Phone

(603) 868-1066 Fax

[email protected]

Charles A. LevesqueExecutive Director

NEFA

PO Box 2911

Concord NH 03302-2911

(603) 229-4965 Phone

[email protected]

CONTACT INFORMATION - Board of Directors

North East State Foresters Association (NEFA)

NEFA’S MissionThe North East State Foresters Association (NEFA) is the State Foresters

ofMaine,NewHampshire,Vermont,andNewYorkcooperatingwiththe

US Forest Service State & Private Forestry on issues of common interest

(see www.nefainfo.org).

This booklet is part of a series on the economic importance and value of

forest-based manufacturing and forest-related recreation and tourism of

the four states in the NEFA region. Past reports can be viewed at www.

nefainfo.org.

This publication was funded in large part through a grant from Public

Service Company of New Hampshire and the U.S. Endowment for Forestry

and Communities through the Northern Forest Center.

Documents

The E C O N O M I C IMPORTANCE of NEW HAMPSHIRE’S … · The Economic Importance of New Hampshire’s Forest-Based Economy. FOREST-BASED ECONOMY 2013. E C O N O M I C. IMPORTANCE